ESTATE PLANNING ē PROBATE ē ESTATE AND
TRUST ADMINISTRATION ē POST DEATH AND POST INCAPACITY
Frequently Asked Questions
Following are some of the frequently asked questions we receive
regarding estate planning, probate,
estate and trust administration, and related post death and post incapacity
issues in Arizona.
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What is a Will?
A Will is a written legal document with instructions for
distributing an individualís assets after his or her death. A Will must be
formally executed as required by state law to be legally valid and enforceable.
If I have a Will, will I avoid probate?
No. In fact, having a Will
assures that your estate will pass through probate. Probate is necessary to
ensure that a Will was correctly
executed and is legally valid so your assets can pass to those named in the
What is probate?
Probate, also called proof of Will, is a
court-initiated procedure by which a Willís validity
is proven to the satisfaction of the court. If the validity of a Will is proven
to the satisfaction of the court, the Willís validity cannot subsequently be
challenged on the grounds of fraud, testamentary capacity, or undue duress;
however, the probate of a Will does not affect an interested partyís rights to
question the Willís provisions. When a
decedent dies without a Will, a probate proceeding can be filed with the probate
court for the purpose of determining the rights of the deceased personís legal
heirs, and to have the person with legal priority appointed as the personal
representative over the decedentís probate estate.
What property is
included in an individualís probate estate?
An individualís probate estate
(sometimes called probate property) includes only property subject to estate
administration after the death of the
individual (or after the incapacity of the individual). In general, property owned by an individual at the time of
death or acquired by the deceased
individualís estate after death is included in the deceased individualís probate
estate. The property of the decedentís probate estate passes to the decedentís
designated beneficiaries in a Will, or in the absence of a Will, passes
according to the intestacy laws
of the State of Arizona if such individual
resided or died in Arizona. Examples of probate property are
houses, cars, furniture, stocks, bonds, and bank accounts
titled in an individualís name. Examples of property
not typically included an individualís probate estate
(and thus may avoid probate) are assets
which pass pursuant to a
beneficiary designation form such as with life insurance policies, annuities,
and certain retirement accounts, or assets held jointly with others with right
of survivorship, or assets titled in the name of
the deceased individual's trust.
How can a person
change his or her Will?
A Will is typically valid and effective until it is
revoked, destroyed, or invalidated by writing a new Will. Alterations to an
existing Will, such as crossing out language or adding a new provision,
may not meet the legal requirements for executing a valid
Will and may not affect
the terms of an existing Will. Changes or additions to an existing
Will should be made by a properly
executed Codicil or by a subsequent executed Will which properly revokes the
prior Will. A Codicil is a document executed in compliance with
applicable state law that properly modifies
or revokes an existing Will or
What is a trust?
trust is a legal entity created to hold assets for the benefit of
or entity. There are many types of trusts that can be used to achieve a personís
or entityís estate planning objectives.
What is a living
A living trust, also called an inter vivos trust, is a trust
agreement which becomes effective during the lifetime of the person who created
the trust. The person who creates the living trust may change
or revoke the terms of the
trust agreement during his or her lifetime
(referred to as a ďrevocable trustĒ or a
ďrevocable living trustĒ). Because a
revocable living trust typically
contains instructions for managing trust assets during the trust creatorís
lifetime as well as instructions for distributing trust assets upon the trust
creatorís incapacity or after his or her death, a living trust
eliminate the need for conservatorship or probate proceedings
if the person has taken the appropriate
steps to title assets in the name of the trust.
What is a revocable
A revocable living trust is a trust created by
a person during the
personís lifetime, and the creator of the
trust reserves the right to change or revoke (terminate) the trust
anytime during such person's life. A revocable
living trust is a contract made between the
person who creates the trust (sometimes
referred to as a ďsettlorĒ or ďgrantorĒ or ďtrustorĒ) and the trustee who is
responsible for carrying out the trustís terms and managing the trust property for the
benefit of the person named as beneficiary. Most often,
a revocable living trust refers to a
trust whereby the creator designates himself or herself to act as the original trustee of the
trust, designates himself or herself as primary beneficiary of
the trust, and titles his or her assets
in the name of the revocable living trust. Assets may be transferred
in the name of a revocable living trust at or shortly
after the trust agreement is signed. The
terms of the trust agreement govern the assets of the trust during the personís
lifetime, which is different from a Will that can only operate to govern a
personís assets after the personís death.
What is an irrevocable
An irrevocable trust is a trust in which the creator transfers assets
to a trust with no power to alter, amend, or revoke the terms of the trust at a
later date. To qualify for exclusion from the trust creatorís estate, the
creator must not retain any incidents of ownership in the trust. An irrevocable
trust may be a vehicle to remove assets from the trust creatorís taxable estate
by transferring assets into the irrevocable trust for the designated beneficiary
or beneficiaries under the irrevocable trust.
If I have a revocable living
trust, do I still need a Will?
Yes. A Will directs how a deceased personís
assets are to be distributed after
death. A revocable living trust directs how a personís assets are to be
distributed during the personís life, and only becomes irrevocable at death
governing how the assets of the trust will be distributed after the creatorís
death. When a revocable living trust is created, it
can be funded
at or shortly after the creation of the
Funding occurs when the person's assets are transferred into the
name of the trust.
acquired by an individual or a married couple are left out of the trust or
forgotten to be titled in the name of the trust. Having a ďpour-overĒ Will
directs that any assets held in a decedentís name will be transferred at death
to the decedentís trust. While these decedentís assets must pass through the
probate process, distribution is according to the terms of the trust because
the trust is the primary beneficiary
under a "pour-over" Will. A Will also permits a person to nominate a guardian to care for
the person's minor children
at such person's death.
What is a conservatorship?
A conservatorship is a court procedure where
the court, after due process, appoints a
family member, entity or private fiduciary as the
conservator to manage the finances and assets
of a minor or an adult who is unable to
properly manage their own finances. A conservator is generally required to post bond.
The conservator has legal obligations to
manage assets for the benefit of the minor or the incompetent adult. If you become
incapacitated, another person could step in and make decisions for you if you
have allowed such personís name to be listed on your assets. The need for a
conservatorship is often eliminated with a durable power of attorney, a
healthcare power of attorney, or both. These powers of attorney can avoid the
costly and time-consuming court procedures that are often required to establish
What is a
A guardianship is a court procedure where the court, after due
process, appoints an individual or private fiduciary as guardian
to care for the health needs of a
minor or an incapacitated person. The
guardian is responsible for providing proper food, health care, medical
attention, housing, and other necessities for the minor or incapacitated person
who is incapable of providing for themselves on their own accord.
The need for a guardianship may be
eliminated with a properly executed healthcare power of attorney.
What is a beneficiary?
A beneficiary is the person (or persons) you can
choose to receive some or all of your assets in the event of your death.
Electing beneficiaries (and keeping your choice up to date) allows you to make
sure your assets are distributed at your
death in the manner you desire. If there is not a living beneficiary
named at the time of your death for any life insurance policy, annuity, or
retirement account which require a beneficiary designation, the benefits
may become paid to your estate.
In that event, your Will, if you have one, or
State intestacy laws if you do not have
a Will, will determine who becomes the recipient(s) of your assets and benefits.
Usually, beneficiary designation forms for a life insurance policy, an annuity,
a retirement account, and certain other bank or brokerage accounts provide for
the designation of a primary beneficiary and at least one contingent
beneficiary. Contingent beneficiaries are necessary so that if a primary
beneficiary does not survive you (or is deemed to have pre-deceased you by
disclaimer), then the asset will pass to your second choice, the contingent
beneficiary. A trustee of a trust
can be named as a beneficiary, and a
beneficiary, of a trust is a
person entitled to enforce the terms of
What is the difference
between an heir and a devisee?
Under Arizona law, an heir is entitled to
inherit from a decedent who died without a Will. Heirs are generally related to
a decedent by blood, adoption, or marriage. By contrast, a devisee can receive
property from a decedent simply by being designated in the decedentís Will and
does not necessarily have to be related to the decedent.
What is an estate?
For estate tax purposes, a decedentís estate generally includes all property
owned or under decedentís control immediately prior to death, and includes
assets held in revocable trusts, life insurance proceeds if decedent had
any ownership interests, and innumerable other assets such as real estate, bank
accounts, brokerage accounts, marketable securities, retirement accounts,
automobiles, boats, household furniture, artwork, valuable collections, jewelry,
etc. Contrast with a decedentís probate estate generally includes property titled in
decedentís name and property which cannot be titled in decedentís name but is
under decedentís control immediately prior to death.